Analysis: Surviving Without Biodiesel Tax Credit

regdarlingWhile the expiration of the federal $1-per-gallon biodiesel tax credit (BTC) has been pretty tough on the industry this year, some biodiesel makers could survive without it. This analysis from The Motley Fool, a website that looks at investments, points to how biodiesel giant Renewable Energy Group and renderer and renewable diesel maker Darling International have business models that seem to make it possible, although not easy, to be successful without the credit that expired at the 2013.

REG, for example, anticipated the expiration and took that into account when doing their earnings forecast for the first quarter of 2014. And even while biodiesel production was even lower than the company anticipated, due to an abnormally cold winter that caused natural gas prices to spike, while feedstock costs rose and biodiesel prices fell, REG seems to be weathering the storm.

The silver lining is that Renewable Energy Group was able to produce positive adjusted EBITDA despite a barrage of unfavorable conditions. That can be chalked up to the company’s commitment to operational efficiency derived from willingness to invest in a national logistics network and the best process technology. And, of course, management’s focus on the long term.

Darling International is not focused solely on producing renewable fuels, but has taken advantage of its leading rendering business (animal fats and used cooking greases, or the inputs for diesel) to create the Diamond Green Diesel joint venture. Renewable diesel is a hydrocarbon, has a different molecular structure than biodiesel, and can capture higher RIN values as a next-generation fuel. Despite the advantages, it is still blended into the existing petroleum-based fuel supply, and therefore benefits from the BTC. Luckily, Darling International’s diverse business structure has insulated it from the expiration of the credit. In fact, the company has benefited from the increase in feedstocks since the end of last year.

The article goes on to say that while the return of the tax credit would be good news for REG and Darling, and of course, other biodiesel makers, at least these two companies show you could survive without the credit. In addition, the authors say this short-term uncertainty for biodiesel might present a great buying and investing opportunity if you’re looking at the long term.

BayWa Commissioned Solar Farm in Great Britain

BayWa r.e. Commissions 18 MWp Solar Farm in Great BritainBayWa r.e. has commissioned its fourth solar farm, Whitland, in Great Britain. Despite the continual bad weather, the project team were able to construct and commission the 18 MWp solar plant in only nine weeks.

Matthias Taft, Managing Director of BayWa r.e., said of the project, “The rapid implementation of the Whitland solar farm shows that our project team and technical know-how put us in an excellent position. This enables us to finance even larger projects without difficulties. This in turn ensures commissioning on time. Together, this results in a dynamic and economical project implementation at every project stage – from engineering and construction to the ultimate project sale to institutional investors.”

The Whitland solar farm was established on a 28 hectare in the Welsh village of the same name. It comprises 69,000 polycrystalline modules on freestanding supports. Annually, this plant will generate around 17 million kWh green power and can cover the electricity demand of around 5,000 households. Apart from completed projects, BayWa r.e. has significant projects in the pipeline for Great Britain.

A New Option to Finance: Clean Energy Bonds

The Clean Energy Group, the Brookings Institution and the Council of Development Finance Agencies have released a paper on a powerful but underutilized tool for future clean energy investment: state and local bond finance. The report, “Clean Energy Finance through the Bond Market: A New Option for Progress,” find that as Federal clean energy subsidies blogphoto-Wind-solar-moneydecrease, agencies that issue public finance bonds are willing to finance renewable energy and efficiency projects. However, the report says, the clean energy community must embrace the bonds as a new finance tool.

According to the report development agencies are only experimenting with clean energy bonds. However, the bond finance community has accumulated significant experience in getting project finance to scale and knows how to raise large amounts of needed capital by selling bonds to Wall Street. The challenge, then, is to create new models for clean energy bond finance in states, and to establish a new clean energy asset class that can easily be traded in capital markets.

With this in mind, the report argues that state and local bonding authorities and others to do the following:

  • Establish mutually useful partnerships between development finance experts and clean energy officials at the state and local government levels.
  • Expand and scale up bond-financed clean energy projects using credit enhancement and other emerging tools to mitigate risk and through demonstration projects.
  • Improve availability of data and develop standardized documentation so that the risks and rewards of clean energy investments can be better understood.
  • Create a pipeline of rated and private placement deals, a new clean energy asset class, to meet the demand by institutional investors for fixed-income clean energy securities.

“Another report issued this week from the global scientific community at IPCC underscores the urgency of finding new ways to finance no-carbon technologies at massive scale,” said Lewis Milford, president of CEG and co-author of the report. “We need to finance clean energy the same way we have financed large public infrastructure projects and make sound investments that will benefit generations with low bond rates for new, clean energy generation. Our current way of financing clean energy not only makes it too expensive, but it simply cannot meet climate mitigation and adaptation demands in the next few decades.”

BioEnergy Bytes

  • BioEnergyBytesDFFarmer owned, Siouxland Energy Livestock Cooperative have announced that the Board of Directors has approved the name change to Siouxland Energy Corporation. Along with the name change, a new logo was developed.  
  • Dr Martin Read CBE has been appointed as Chair of the CFD Counterparty Company by Energy and Climate Change Secretary of State, Edward Davey. The CFD Counterparty Company is a new Government-owned company being established as part of Government’s Electricity Market Reform. Dr Martin Read will be supported in this three year role by Jim Keohane, as the Senior Independent Director (SID). The two appointees will also take on the Chair and SID positions of the Electricity Settlements Company when it is established.
  • The Offshore Wind China Conference & Exhibition, the Wind Farm O&M China Conference & Exhibition and Distributed Generation China will take place concurrently at Shanghai Mart in Shanghai July 2-4, 2014. Registration for all three events is open.
  • Trina Solar Limited has announced two of its PV power plants in the United Kingdom have successfully completed connection to the grid. The company is an investor in and sole project developer for these projects, which have a total capacity of 23.77 MW. The two projects were developed using Trina PC05A 255Wp modules and will receive 1.6 Renewables Obligation Certificates (ROCs), equivalent to GBP 42.02 per megawatt-hour (MWh). They are expected to generate 24,673MWh electricity annually.

Hydrogen Fuel Cells Soon to Power Forklifts

Forklifts may soon be powered by zero-emission hydrogen fuel cell systems. Research being conducted by Sandia National Laboratory and Hawaii Hydrogen Carriers (HHC) are looking to design a solid-state hydrogen storage system that can refuel at low pressure four to five times faster than it takes to charge a battery-powered forklift, a $33 billion market in 2013 according to Pell Research. The researchers say this technology would give hydrogen a competitive advantage over batteries.

Dino Vournas, Sandia National Labs

Dino Vournas, Sandia National Labs

“Once you understand how these forklifts operate, the fuel cell advantage is clear,” said Sandia’s project manager Joe Pratt.

Pratt explains that refueling hydrogen fuel cell powered forklifts takes less than three minutes compared to the hours of recharging needed for battery-powered forklifts. In addition, fuel cell-powered forklifts are able to operate continuously for eight or more hours between fills. Whereas today companies using battery-powered forklifts need to purchase three battery packs for each forklift to ensure continuous operation. They also need to set aside warehouse space for battery recharging.

Sandia has worked with the fuel cell forklift industry for several years to help get clean, efficient and cost effective fuel cell systems to market faster. Standards developed by Sandia soon will be published so industry can develop new, high-performing hydrogen fuel systems for industrial trucks.

Intrigued by the potential benefits of fuel cells over the electric batteries that now power most forklifts, HHC obtained a grant from the Department of Energy’s Office of Energy Efficiency and Renewable Energy (EERE) and asked Pratt to help improve the design of a hydrogen storage system for fuel cells.

Pratt has spearheaded other Sandia efforts to introduce hydrogen systems into the marketplace. He served as technical lead, for instance, for studies on the use of fuel cells to power construction equipment, personal electronic devices, auxiliary equipment and portable generators. Most recently, he led a study and subsequent demonstration project on commercial use of hydrogen fuel cells to provide power at ports.

HHC is developing technologies for the fuel cell forklift market and expects cost reductions and performance improvements that will help the market grow. The company is developing a low-pressure hydrogen storage system that can be refueled at standard industrial gas pressures. This technology should reduce fuel system cost and expand the market to facilities that can’t accommodate conventional high-pressure fueling systems.

Biofuel Groups Oppose RFS Delay Request

Leading biofuel industry groups are opposing a delay requested by petroleum industry in a 2013 Renewable Fuel Standard case.

Dont Mess with RFSThe Renewable Fuels Association (RFA), Biotechnology Industry Organization (BIO) and Growth Energy together filed a joint response yesterday in the U.S. Court of Appeals for the District of Columbia Circuit in opposition to the American Petroleum Institute’s and American Fuel & Petrochemical Manufacturers’ motion to “sever and hold in abeyance their challenge to the 2013 Renewable Fuel Standard” that was filed on Friday. The case is Monroe Energy, LLC v. United States Environmental Protection Agency, which was argued before the Court on April 7.

As the groups explained in their response to the motion, “Respondent-Intervenors Biotechnology Industry Organization, Growth Energy, and Renewable Fuels Association oppose the motion to sever API and AFPM’s petitions and place them in abeyance. The petitions have been fully briefed, responded to, and argued. No purpose is served by pulling API and AFPM’s petitions back a week after argument, to hold them indefinitely and consolidate them with hypothetical later-filed petitions.”

Incbio Delivers Biodiesel Plant for Tunisia

incbiologoPortuguese biodiesel equipment maker Incbio has delivered an 8,000MT per year Biodiesel plant to Tunisia. This company news release says Biokast Energy will operate the fully automated industrial ultrasonic biodiesel plant in North Africa.

It uses Incbio’s ultrasonic reactors to produce EN14214 Biodiesel from Used Cooking Oil (UCO), collected from restaurants in Tunis. This will be one of the most advanced and efficient transesterification plants in the world, employing as three most important design parameters which form the base for Incbio’s technology: small footprint, low cost and high efficiency, which is both innovative and widely proven in Biodiesel production plants globally.

The plant is fully built on skids, so it should take less than a week from the time it arrives until it is producing biodiesel.

Characterizing Photosynthesis to Help Biodiesel

algaefull1Researchers in California have found a faster way to figure out more of the secrets of photosynthesis, and that could lead to new strains of algae better for biodiesel. Officials with the Carnegie Institution for Science say they have developed a new technique that will accelerate genetic characterization of photosynthesis:

A type of single-cell green algae called Chlamydomonas reinhardtii is a leading subject for photosynthesis research. Despite its importance in the research world, few tools are available for characterizing the functions of its genes.

A team including Carnegie’s Martin Jonikas developed a highly sophisticated tool that will transform the work of plant geneticists by making large-scale genetic characterization of Chlamydomonas mutants possible for the first time. Their work is published by The Plant Cell.

Their tool is a major step forward in the goal of identifying the genes that are necessary for photosynthesis, as well as other cellular functions such as the production of oily fats that are crucial for biofuel development. The use of similar tools for non-photosynthetic, single-celled organisms has revolutionized the understanding of cellular processes in bacteria and yeast, as well as animals.

Central Texas Marks 20 Years of Alternative Fuels

lone-star-20The Lone Star Clean Fuels Alliance in Austin, Texas this week celebrated 20 years of being green, starting before being green was cool.

The LSCFA recognized the achievements of many leaders who helped Austin cut 10 tons of greenhouse gas emissions in one year alone, and attendees had the opportunity to drive renewable energy vehicles such as the Nissan Leaf and a stand-up electric police mobility vehicle.

The LSCFA, formerly known as Central Texas Clean Cities, is a non-profit coalition dedicated to reducing petroleum consumption through alternative fuels. Over the past 20 years the association has helped to clean up City of Austin fleet vehicles as well as other fleet and personal vehicles in five Central Texas counties counties. In 2012 alone, its stakeholders reduced petroleum consumption by 1.6 million gallons. Clean Cities helps to advance the alternative or renewable fuels of propane, biofuels: ethanol/E85 and biodiesel, natural gas, electric and hydrogen. It was the sixth Clean Cities coalition started in the U.S. where there are now about 90.

EIA Identifies States with the Windiest Energy

single wind turbine Photo Joanna SchroederTwelve states produced 80% of the total wind energy generated last year, according to preliminary data released from the Energy Information Administration (EIA) in the March Electric Power Monthly report.

Number one on the list is Texas, which generated nearly 36 million megawatthours (MWh) of electricity in 2013. Iowa was second, with more than 15 million MWh, followed by California, Oklahoma, Illinois, Kansas, Minnesota, Oregon, Colorado, Washington, North Dakota, and Wyoming. Iowa ranked first in proportion of wind to total electricity generated with 27.4% of net electricity production coming from wind turbines.

These 12 states produced a combined 134 million MWh of electricity from wind. Nationwide, 167 million MWh of power came from wind in 2013, a 19% increase from 2012. Wind power increased its share of U.S. total electricity generation in 2013 from 3.5% to 4.1%. All but 13 states reported to EIA some generation from wind, and 23 states increased their wind generation more than 10% above 2012 production levels. California’s wind generation exceeded geothermal generation for the first time in 2013.

Farm Group Agrees with Climate Change Report

NFUlogoThe National Farmers Union (NFU) agrees with the new Intergovernmental Panel on Climate Change (IPCC) report that renewable energy must play a significant role in climate change mitigation.

“The working group’s report complements NFU’s long-held, member-led policy positions by recognizing the need for a comprehensive renewable energy strategy,” said NFU vPresident Roger Johnson. “Tripling or even quadrupling the share of zero- and low-carbon energy supply from renewables, as the report recommends, will require significant investments in energy technologies that utilize rural America’s renewable and human resources. These investments would pay off not only by helping to mitigate the effects of climate change but by driving significant rural economic development.”

WGIII_AR5_Cover_webThe IPCC third working group report released this week finds that climate change is occurring at a rapid rate, but mitigation strategies such as scaling up renewable energy production could substantially reduce anthropogenic greenhouse gas (GHG) emissions.

According to the report, total anthropogenic GHG emissions have continued to increase over 1970 to 2010 in spite of a growing number of climate change mitigation policies. Total anthropogenic GHG emissions were the highest in human history from 2000 to 2010. Without additional efforts to reduce GHG emissions beyond those in place today, emissions growth is expected to persist, driven by growth in global population and economic activities.

New Zealand to Get 5 MMgy Biodiesel Plant

z energyKiwis (the people, not the fruit) will be a little greener, as New Zealand is set to get a 5 MMgy biodiesel plant. This article from Biodiesel Magazine says Z Energy plans to build the $21 million refinery that will use tallow as its feedstock.

“Cities, countries and [corporations] all have a role to play in ensuring the world addresses very real climate change concerns,” [the mayor of New Zealand’s capital city of Wellington, Celia Wade-Brown] said. “It’s great to see local company Z Energy leading new energy sources and developing a green economy for New Zealand. In light of the recent IPCC report, on the severity and costs of adaptation to climate change, we need to support innovation from Z and others in the business community toward a low-carbon future for New Zealand. In addition to having more efficient vehicles on the road, fuel switching to biofuels, hybrids and electric vehicles will be essential to help us achieve the emissions cuts recommended by the IPCC. As production expands, we will take opportunities to work with Z on Wellington’s future fuel picture, including the civic fleet and Wellington’s bus network.”

When fully up and running, the Z Energy biodiesel plant is expected to use about 10 percent of the country’s inedible tallow production.

Boy Scouts of America Go Solar

gI_120165_BoyScouts 2 CustomThe Boy Scouts of America’s Capitol Area Council, located in Austin, Texas, has gone solar. The 74.15 kW solar arrays sits atop a 31,400 foot Frank Fickett South Training and Service Center. The solar system is made up of 299 solar modules and can be partially seen from Interstate 35. The project was over seen by Meridan Solar and is expected to save approximately $360,000 in energy savings over 25 years.

For the Boy Scouts, choosing to procure solar energy was an easy choice. Raymond Gray, board president of the Capitol Area Council said, “It didn’t just make financial sense to incorporate solar power; it matched the values we have taught generations of Americans for more than 100 years and continue to believe today. It’s one thing to say we should be ‘green’, invest in new technology and be a good example; it’s another to actually do those things.”

This project was of particular significance to Meridian Solar’s President and Founder, Andrew McCalla. “This organization and its mission are close to my heart, as I am a third generation central Texas Scout. When Meridian decided to partner with the Capitol Area Council to help them capture the benefits of solar energy, I knew that this installation would have benefits well beyond that of lowering the operating costs of the Frank Fickett Center. In addition to freeing up funds to further scouting’s core mission, the installation will serve as an educational platform in the benefits or renewable resources for thousands of present and future Scouts.”

12 U.S. States Dominate Wind Power

According to Today in Energy, 12 states dominated the U.S. wind energy market in 2013. These states accounted for 80 percent of wind-generated electricity according to preliminary data released in the Energy Information Administration’s (EIA) March Electric Power Monthly.

Once again, Texas took the honors of top wind power state with nearly 36 million megawatthours (MWh) of electricity produced annually. Iowa was second, with more than 15 million MWh, followed by California, Oklahoma, Illinois, Kansas, Minnesota, Oregon, Colorado, Washington, North Dakota, and Wyoming.

Today in Energy 12 Top wind statesCombined, these 12 states produced 134 million MWh of electricity from wind. Nationwide, 167 million MWh of power came from wind in 2013, a 19 percent increase from 2012. Wind power increased its share of U.S. total electricity generation in 2013 from 3.5 percent to 4.1 percent. All but 13 states reported to EIA some generation from wind, and 23 states increased their wind generation more than 10 percent above 2012 production levels. California’s wind generation exceeded geothermal generation for the first time in 2013.

The proportion of wind to total electricity generated varied widely by state. Leading the nation in wind generation share was Iowa with 27.4 percent of net electricity production coming from wind turbines. Second was South Dakota, at 26 percent. Other states with more than twice the national share of 4.1 percent wind power were Kansas, Idaho, Minnesota, North Dakota, Oklahoma, Colorado, Oregon, Wyoming, and Texas.

BioEnergy Bytes

  • BioEnergyBytesDFJim Adams, president of U.S. Operations for Natural Power, has been selected to chair one of the sessions during the upcoming American Wind Energy Association (AWEA) annual conference. The event will take place May 5-8, 2014 in Las Vegas, Nevada. On May 8th, Adams will chair the morning session in the Wind Resource and Planning track, titled ‘Advancements in Resource Assessment Technology’. This session is expected to discuss new approaches in the estimation of wind energy for assessment purposes, while also maintaining a focus on current methodologies. The panel includes Justin Sharp from Lockheed Martin; Jon Meis, Managing Director at EWC Weather Consult GmbH; and Daran Rife, Global Head of Mesoscale Modeling at DNV GL – Energy.
  • Hanwha SolarOne Co., Ltd. has announced its Chairman and CEO Ki-Joon HONG has retired from the Company. A replacement is expected to be announced by the end of April.
  • According to a recent report from Navigant Research, worldwide sales of hybrid and electric trucks for the commercial market will reach nearly 105,000 by 2020. Despite government support, such as funding under the United States’ economic stimulus efforts, the market for hybrid and electric trucks has struggled to expand beyond a narrow niche. Nevertheless, a significant number of players continue to develop hybrid electric vehicle (HEV), plug-in hybrid electric vehicle (PHEV), and battery electric vehicle (BEV) trucks for a variety of applications, and the market is expected to pick up steam in the coming years.
  • Energy Storage North America (ESNA), has announced the first round of confirmed keynotes for this year’s ESNA 2014 taking place at the San Jose Convention Center from September 30 – October 2, 2014. Early bird registration is open.